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JDSU Urges Ops to Sell Their Location Data

Sarah Thomas
8/22/2013

As operators hash out their big-data strategies, the prospect of monetizing the stashes of customer data they have accumulated is looking increasingly appealing. JDS Uniphase (JDSU) wants to help them do it without ruffling any feathers.

The test and measurement vendor's new Location Insights Services (LIS), a variation on the more familiar location-based services (LBS), is born from its March acquisition of geolocation software maker Arieso. The idea is that mobile operators take the wealth of location data they already have at their disposal, aggregate and anonymize it, and sell it to businesses who want to study the trends to inform decisions, such as where they should open their next storefront, where customers may shop next, or where and when they should display ads to reach a certain demographic.

JDSU (Nasdaq: JDSU; Toronto: JDU) says its GEOinsights application lets them share this data bundled by external systems without the need for complex system integration with data warehouses.

LIS differs from traditional LBS in that the data collected is not down to the individual and it doesn't require them to opt in or accept ads on their smartphones. It's the business-to-business or business-to-government approach, as Dr. Michael Flanagan, CTO of the Arieso business unit at JDSU, describes it.

"Location Insight Services is not trying to provide an instantaneous answer on current location, but telling more about how that is trending," he says.

And, it's a market that could be worth $11 billion by 2016, according to JDSU's own research, carried out by STL Partners. Flanagan says operators could opt to directly sell their data to businesses or work with a partner that would manage the service and combine their data with other operators.

Why this matters
The potential money to be made from customer data is certainly compelling. It's led a number of wireless operators to start exploring these kinds of big-data services already. In the US, Verizon Wireless formed what it calls Precision Market Insights division in 2012 to sell customer data to third parties, and AT&T Inc. (NYSE: T) has updated its customer privacy policy to allow it to aggregate customer data to sell to advertising and marketing firms. It gave customers the ability to opt out, which turned out to be a good call as a number weren't happy about it. (See AT&T Eyes Big Data Revenues.)

Even thought this type of aggregation is much less personal than individually targeted LBS, operators will still have to tread carefully. Telefónica Digital learned the hard way that services have to be transparent and end-user controlled after its plan to sell anonymized data to retailers in Germany prompted a backlash. (See Telefónica Digital Plays By Its Own Rules .)

And, if there's one thing the NSA scandal has taught us, it's that people are sensitive to what data is tracked and how it's used, even if operators are technically operating within their rights. It's a big opportunity, but one operators will also have to keep in check.

For more

— Sarah Reedy, Senior Editor, Light Reading

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sarahwallace
sarahwallace
8/28/2013 | 8:48:38 AM
Re: LBS, LIS, GPS, OMG

@MarkC73 Yes, applications like Foursquare take the fear out of location based services. Why wouldn't I want a 10% discount for checking in at my local coffee shop....

MarkC73
MarkC73
8/28/2013 | 1:43:03 AM
Re: LBS, LIS, GPS, OMG
@sarahwallace, interesting and I agree, it's one thing to have a big bad carrier sell your data as you pay your monthly bill, but change that to something more beneficial and voluntary and people are much more willing to allow their information to be used in anonymous ways.  Heck even app based things like games, reviews, or coupons sounds much more palatable.
sarahwallace
sarahwallace
8/27/2013 | 4:42:12 AM
Re: LBS, LIS, GPS, OMG
As we have found in our Heavy Reading research, subscribers seem more willing to give their information if it means more personal service for them. Even if more generalized, I think this helps to benefit the end user in the long run.
DanJones
DanJones
8/22/2013 | 1:14:24 PM
Re: LBS, LIS, GPS, OMG
I just wanted my Peets coupon, dammit!
Sarah Thomas
Sarah Thomas
8/22/2013 | 1:09:45 PM
Re: LBS, LIS, GPS, OMG
Ah I gotcha. Well, your trips to the mall are going to suffer so much now!
DanJones
DanJones
8/22/2013 | 11:47:59 AM
Re: LBS, LIS, GPS, OMG
Oh yeah, I'm saying I ALREADY spoil their stats because I habitually switch off location if my battery gets low.
Sarah Thomas
Sarah Thomas
8/22/2013 | 11:31:50 AM
Re: LBS, LIS, GPS, OMG
I don't think what JDSU is suggesting is above and beyond what's already being tracked, so I wouldn't anticipate incremental strain on the battery life. But, if they amp up the location tracking, it certainly would.

What JDSU discussed seemed fairly benign -- helping retailers do their jobs better, making transporation more efficient, etc. But I imagine the operators are eyeing selling this info to marketing and ad agencies, too. That's what AT&T directly said. That's where it gets more dicey, because we're talking ads on the phone, in the mail, online...more ads, ads, ads. Even if you don't care about the privacy violation, you might care about being annoyed.
DanJones
DanJones
8/22/2013 | 11:23:58 AM
LBS, LIS, GPS, OMG
Might want to eek more batttery life out of GPS location radios first. GPS is the first thing I turn off if I get concious of battery life on my phone.

Also, don't really care too much at the moment if carriers know where am but don't care to help them make more money off selling my data.          
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